We recently published a list of 10 Best Virtual Reality Stocks To Buy Now. In this article, we are going to take a look at where Universal Display Corporation (NASDAQ:OLED) stands against other best virtual reality stocks.
Overview of the Global VR Market
Virtual Reality is a computer-generated simulation that allows users to interact with a three-dimensional environment. The four elements that characterize virtual reality and differentiate it from other technologies such as augmented reality and mixed reality are a 3D-simulated environment, immersion, sensory engagement, and realistic interactivity, as revealed by HP.
According to a report by Fortune Business Insights, the global virtual reality market size was valued at $25.11 billion in 2023 and is expected to grow from $32.64 billion in 2024 to $244.84 billion by 2032, at a compound annual growth rate of 28.6% during the forecast period (2024-2032).
Region-wise, North America is expected to dominate the global VR market over the forecast period. Another rapidly growing region is Asia Pacific with growth driven by the rising demand for immersive technologies in emerging economies. China, one of the major distributors of head-mounted VR devices and other hardware, is forecasted to have the highest market share in the region. Simultaneously, Europe is the early adopter of virtual solutions in the automotive industry and will be experiencing significant growth, with Germany and the UK as its leading markets.
How is Virtual Reality Transforming Today's World?
The virtual reality devices used today have their foundation laid on the first head-mounted augmented reality display "The Sword of Damocles"which was introduced by Ivan Sutherland in 1968. While firms such as Sega and Nintendo developed VR gaming systems in the 1980s and 1990s, it was not until the 2010s that high-quality VR headsets boasting powerful graphics and motion-tracking technology came to the market.
While gaming has been driving the popularity of VR, the potential of the technology has been realized in a multitude of other industries. The American shipping company UPS committed to millions for the advanced training of its drivers, with the firm’s industry-leading training powered by the use of virtual reality in an industrial training environment. Before drivers operate an actual delivery vehicle, the company's Driving Simulator provides realistic driving experiences.
Virtual reality and augmented reality have also penetrated the healthcare sector as they offer transformative opportunities for medical training, patient care, and therapeutic interventions. The treatment domains in which these technologies are used to treat patients are diverse and include pediatric diagnostics and treatments, pain management, mental health, neurological disorders, surgery planning, intraoperative procedures, telemedicine, as well as post-operative and other rehabilitation therapies. The penetration is evident from the fact that the US FDA has authorized 69 medical devices that incorporate augmented reality and virtual reality.
Virtual Reality is also changing the game for the entertainment industry, especially for artists. Fortnite witnessed a record turnout of more than 12 million attendees to its virtual concert featuring the hip-hop superstar Travis Scott in 2020. Therefore, VR applications continue to spread around today’s world. The renowned luxury car manufacturer BMW has materialized virtual reality experiences in the automotive space. The company expanded its revolutionary driving experience with BMW M Mixed Reality which tends to blur the boundaries between the physical and virtual worlds through state-of-the-art VR/MR technologies.
A technician in a lab coat carefully working with OLED displays and components.
Our Methodology
In order to compile a list of the 10 best virtual reality stocks to buy now, we utilized stock screeners, ETFs, and online rankings to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best virtual reality stocks to buy now have been arranged in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Universal Display Corporation (NASDAQ: OLED)
Number of Hedge Fund Holders: 27
Universal Display Corporation (NASDAQ:OLED) serves as a world leader in the invention, research, development, and commercialization of state-of-the-art OLED (organic light-emitting diodes) technologies and materials. The company has grown from an R&D start-up to a global leader in the OLED industry. It licenses its proprietary OLED technologies to manufacturers of products for display applications including mobile phones, wearables, tablets, notebooks and televisions, and specialty and general lighting products.
While displays are essential for various consumer electronics products, OLED technology powers the VR products of today. The firm’s proprietary technologies and materials can be found in virtually every commercial OLED product, ranging from smartwatches and tablets to smartphones and TVs, including Samsung’s Galaxy series and LG’s OLED TVs. OLED technology is also used in Sony's PlayStation VR2 as well as Apple Vision Pro.
On October 30, Universal Display Corporation (NASDAQ:OLED) reported its third quarter 2024 financial results. Total revenue was $161.6 million as compared to $141.1 million in the prior-year quarter. While the revenue from royalty and license fees grew over the year, revenue from material sales declined due to changes in customer mix as material volumes were relatively flat between periods. Overall, the management sees 2024 as the start of a new OLED adoption cycle for medium-sized displays, especially IT and automotive.
Universal Display Corporation (NASDAQ:OLED) has a leading position in the OLED ecosystem with unparalleled expertise and a global footprint. The firm currently owns, exclusively licenses, or has the sole right to sublicense over 6,000 patents issued and pending across the world. While the VR market is expected to expand in the coming years, the firm has a strong growth trajectory to pursue.
Overall, OLED ranks 9th on our list of best virtual reality stocks to buy now. While we acknowledge the potential of OLED as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than OLED but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
